And so I think that’s another element you have to consider. I think, look, the number I would like you to focus on is what we deliver in ’23, which, net of the taxes we paid for coffee, is around about $4 billion. And so there might be some one-time payment coming our way. And so we need to make sure that we have enough headroom. But I want to reassure you that in terms of free cash flow, we are very happy. We have best in class, I believe, cash conversion cycle. We continue to be very disciplined in terms of lowering overdue across the board, and inventories are coming down. And so we feel good about the cash flow generation of the company.
Steve Powers: Very good. Very good. Thank you for that. And it sounds like you’re going to talk a little bit more about this at CAGNY. But to the extent you can talk about it now, just the prospects for volume recovery and organic growth acceleration in North America. I guess, how quickly do you think that is likely to manifest in ’24? Is that going to be a slower build, or do you think we should expect some results sooner as you leverage some of the commercial investments, it sounds like you made in the fourth quarter.
Dirk Van De Put: Yes, I think you said it right at the end there. In the fourth quarter, if you think about it, on one hand, we had a good year, and we were coming with a price increase, which, by the way, has been agreed in the U.S. in the beginning of the year, so no need to push in volumes from our side. Then we had the Clif system integration changeover, and so we needed to bring our inventory down and manage it very tightly. And then we talked about the Give & Go holiday kits that we stopped selling because the margins were not interesting for us. So if I exclude those and look at the rest of the business, the volume mix performance in Q4 was, in fact, quite good. So we’re expecting a good volume mix performance right away in Q1 of next year.
It is really a one-off situation in Q4. So we don’t really necessarily feel like there is a slowdown in North America. It’s not going to be massive volume growth, but it’s going to be positive volume growth in the beginning of the year. So that’s where we are. It’s not going to be a slow build-up. We will continue where we are without the exceptionals that we had in Q4.
Steve Powers: Okay. Very good. Thanks, Dirk. I’ll pass it on.
Dirk Van De Put: Thanks.
Luca Zaramella: Thank you.
Operator: Our last question comes from Alexia Howard, Bernstein.
Alexia Howard: Good evening, everyone.
Dirk Van De Put: Hi, Alexia.
Luca Zaramella: Hi.
Alexia Howard: Hi. So, two questions. First of all, on innovation. I’m just wondering if you can give us a quick status update on whether the pace of innovation is likely to pick up going forward. It feels like with the pandemic and the supply chain disruption, it’s been very hard to do innovation over the last several years. Do you anticipate a pickup going forward? And then I have a follow-up.
Dirk Van De Put: Yes, we are going through a bit of a change in the way we look at innovation. If you think about our business around the world, we have quite a rhythm of small innovation, new flavors, new sizes of packs, as we do PPA and RCM. But that leads to hundreds of small projects which do drive our business. But we are gradually eliminating probably close to half of those small projects because, in fact, over time, they don’t have that much of an impact on the business. Since overall, our business is doing well, we can afford to do so. And we are shifting our focus to bigger innovation projects. So the ones that I would mention is, first of all, making healthier versions of our mainstream products. So I’m referring to, for instance, what you’ve seen so far, an Oreo gluten-free or Oreo zero sugar in China, gluten-free in the U.S., doing quite well.
And you can expect that we will continue expand those efforts across other brands. Then we are entering quite significantly in cakes and pastries. And there you can expect us to push quite hard. And so you could see the OREO Cakesters or the Oreo Airy Cake in China. And these are all significant innovations that have the potential or tens of millions of dollars of net revenue per country. We’re pushing hard on premium chocolate, so we launched, for instance, the [Toblerone pralines] (ph), or we have done some big innovations on our core chocolate tablet. So these are bigger innovations that require more work, higher potential, but we are reshifting our efforts towards those. So I don’t know if I would call that what you were asking, Alexia.
Do we see picked up the pace of innovation? I think the impact of innovation on our growth will increase in the coming years, but it’s not driven by more innovation, it’s driven by better innovation, I would say.
Alexia Howard: Very helpful. And then could I just follow up finally? Do you have any observations about the state of the American consumer? I think we’ve heard from other companies that there’s been down trading. There’s vulnerability. There’s channel shifting. I’m just wondering if any of — whether some of the challenges that you’re seeing in North America are being driven by this consumer dynamic.
